Simple Ways to Estimate Home Value

What Is the Assessed Value of a Home?

The assessed value of a home is an estimation of your home’s current price. It is prepared by a municipal property assessor and used to calculate property taxes each year. 

The assessed value of your home is generally based on a percentage (assessment rate determined by the local county or municipality) of the fair market or home appraisal value of the property.

Market Value of a Home

The true market value is the price your home would sell for in the housing market. It is determined by a real estate agent, or a seller and buyer during the negotiation process. Market value of a home is based on a range of factors, including house size, location, similar properties, market trends, and the condition of the home.

Appraised Value of a Home

The appraised value is determined by a professional appraiser, who conducts a visual inspection of the home and other appraisal standards. This appraised value can be used for refinancing, home equity loans and comparing to the market value.

Assessment Rate

If a municipal property assessor deems the market value and appraised value inaccurate, they will use a uniform percentage of each to determine the assessment rate.

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What factors affect home value?

A number of factors can affect the value of your home, including:

  • The neighborhood
  • Its age
  • Its condition
  • Its size
  • Any home improvements or upgrades

There are other factors that impact property values overall, too. These include the local housing market, economy, interest rates and tax rates, Reed says.

What Refinancing Homeowners Need to Know About Appraisals

If you’re refinancing a conventional mortgage, a low appraisal can prevent you from doing so. The home needs to appraise at or above the amount you want to refinance for your loan to be approved. However, if your existing mortgage is an FHA mortgage, you can refinance without an appraisal through the FHA streamline program—a great option for underwater homeowners.

How to Calculate Your Home’s Assessed Value

If you are wondering what  the value of your home is and want to calculate the assessed value, you would need the property’s market value and assessment rate. You can then use this equation:

Assessed value = (Market value x Assessment rate) / 100

If the market value of your home is $300,000 and the assessment rate is 80%, the assessed value is $240,000.

You can also use your property tax bill and the real-estate tax rate of your county to calculate the assessed value of your home with this equation:

Assessed value = (Property tax bill x Tax rate) ✕ 100

If your property tax bill is $2,400 and your county’s department of finance tells you the real-estate tax rate is 1%, you can see that your assessed value is $240,000.

What Happens After the Appraisal?

After the home appraisal is completed, the next step is mortgage underwriting. The underwriter reviews the loan file to make sure everything is in order and that all the required documents have been submitted. The underwriter then assesses the risk associated with the loan and either denies or approves the loan based on all the information.

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Go to Chase mortgage services to manage your account. Make a mortgage payment, get info on your escrow, submit an insurance claim, request a payoff quote or sign in to your account. Go to Chase home equity services to manage your home equity account.

Key takeaways

The prospect of closing the deal on a sale becomes much less intimidating when you’re heading to market with a carefully researched valuation in your back pocket. Remember, the goal is to sell your home at the right time and the right price according to your needs.

Rebecca Lake

This article is meant for informational purposes only and is not intended to be construed as financial, tax, legal, real estate, insurance, or investment advice. Opendoor always encourages you to reach out to an advisor regarding your own situation.

Our Verdict

We chose Zillow as a top option because it has a database full of listings that yields estimates with a 1.9-percent on-market and a 6.9-percent off-market median error rate. Redfin is a solid runner-up choice, with a 2.24-percent median error rate for on-market homes and a 6.74-percent rate for off-market homes and an easy way to get a free comprehensive analysis.

How can I add value to my home?

You don’t get a second chance to make a first impression, and this bit of wisdom can apply to your home and its value.

“Your property’s curb appeal does make a difference,” Duffy says. “Make your home welcoming and tidy — cut your grass, trim any shrubs and add some new plants or flowers.”

A fresh coat of paint either on the interior or exterior of the house will more than pay you back for the money spent, Duffy adds: “This is one of the most cost-effective ways to improve value.”

A minor bathroom or kitchen update (as opposed to large-scale renovations) can also help improve your home’s resale value. You can simply replace an outdated sink, old tiles or dated light fixtures to give these spaces a refresh.

“It also pays to install a new garage door,” Duffy says. “Some reports estimate a new garage door can increase home values by 4 percent — great curb appeal does matter.”

The Advantages of Using One of the Best Home Value Estimator Sites

Home value estimator sites will never be 100 percent accurate. This is because these sites each use various methods to compile their values. But just because they aren’t 100 percent accurate doesn’t mean that they aren’t helpful. For instance, a user may want to know the value of their home before attempting to refinance or sell it without having an appraiser assess it. Appraisals can be very costly, running upward of thousands of dollars depending on the property’s size. So before putting money down, it would be a good idea to see how much the home is worth. Home value estimator sites give a user a ballpark average of a home’s value.

  • The estimate is immediate.
  • A home value estimator is a free tool.
  • Since a home value estimate is free, users can get several estimates and compare them.

Go to Open Houses

Asking others for help is great, but sometimes doing your own Sherlock Holmes impression is useful, too. Open Houses are a great source of information: You can check out comparable homes to your heart’s content and get a great sense of how your house compares to others currently for sale.And while you’re there, talk to the agents showing the homes. Agents hold Open Houses for two main purposes: To show the home being listed but also to meet other potential clients. As mentioned, a good agent will be more than happy to share their knowledge with you.

Frequently Asked Questions (FAQ)

Are free home value estimators online legit?

The values these sites generate are as accurate as they can be accessing public home values. Nashville realtor, Matt Bogosian, of Kerr & Co. Realty cautions on one of the downfalls of these sites:

“But the problem I have with those sites is that they don’t take into consideration things such as the homes condition, the lot the home sits on, the layout or floor plan of the home, and the finishes such as flooring and counter tops. These are all things that can greatly increase or decrease a Homes value. 

Take for example a home that has a steep sloping backyard that backs up to other homes. Well that same home located on a level lot that backs up to woods will certainly fetch more money.”

Ultimately those home valuation sites are there for one reason and one reason only: To find people that are interested in selling their homes, collect their personal data, and then somehow get a piece of the transaction when it happens. -Matt Bagosian, Nashville realtor

Do real estate agents use free online home appraisal websites?

They certainly do. Kris Dolberry, realtor based out of Brentwood,TN, of the Dolberry Group uses these sites for a myriad of reasons.

We use Zillow and Redfin at our listing consultations to get a general idea of what the automated tools believe the property’s worth. And then we look at comps and look at the property specifically and get a tour of it.

Are there other home value websites you should use?

Most real estate agents have similar property value or home value tools on their website. Matt Bogosian, adds..

Most realtors will tell you those sites are not accurate and shouldn’t be used. However most realtors like myself also have our own websites that have the very same home valuation tools. A good majority of these valuation tools get their data from the same sources so you end up with similar results. 

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